ITO, BIKANER v. Sunil KUmar Pugalia HUF, BIKANER

ITA 339/JODH/2009 | 1998-1999
Pronouncement Date: 15-12-2011 | Result: Dismissed

Appeal Details

RSA Number 33923314 RSA 2009
Bench Jodhpur
Appeal Number ITA 339/JODH/2009
Duration Of Justice 2 year(s) 6 month(s) 3 day(s)
Appellant ITO, BIKANER
Respondent Sunil KUmar Pugalia HUF, BIKANER
Appeal Type Income Tax Appeal
Pronouncement Date 15-12-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 15-12-2011
Date Of Final Hearing 07-12-2011
Next Hearing Date 07-12-2011
Assessment Year 1998-1999
Appeal Filed On 12-06-2009
Judgment Text
1 ITA 339-09 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ) ITA NO. 339/JODH/2009 ASSTT. YEAR : 1998-99. THE INCOME-TAX OFFICER VS. SHRI SUNIL KUMAR PUGA LIA HUF WARD 1(4) PROP. M/S. STEEL BULK BIKANER. BIKANER. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.H. GOHEL RESPONDENT BY : SHRI N.R. MERTIA DATE OF HEARING : 07.12.2011. DATE OF PRONOUNCEMENT : ORDER DATED : /12/2011. PER R.K. GUPTA J.M. THIS IS AN APPEAL BY DEPARTMENT AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 1998-99. 2. THE DEPARTMENT IS OBJECTING IN QUASHING THE PROC EEDINGS INITIATED UNDER SECTION 147/148 OF THE IT ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSM ENT WAS COMPLETED UNDER SECTION 143(3)/263/254 OF THE ACT AND ASSESSING OFFICER MAD E ADDITION OF RS. 47 98 443/- ON ACCOUNT OF UNEXPLAINED PURCHASES MADE BY THE ASSESS EE FROM CONCERNS RUN BY ONE SHRI BHIKHA BHAIN. CHOUDHARY. THE ASSESSEE FILED APPEAL BEFORE LD. CIT (A) WHO ALLOWED THE APPEAL OF THE ASSESSEE IN PART. THEREAFTER BOTH T HE PARTIES PREFERRED APPEAL BEFORE THE 2 TRIBUNAL. AN ADDITIONAL GROUND CHALLENGING THE ORD ER UNDER SECTION 147/148 WAS RAISED. ADDITIONAL GROUND WAS ADMITTED AND THE MATTER WAS R EMANDED BACK TO THE FILE OF LD. CIT (A) FOR PASSING A FRESH ORDER. DETAILED SUBMISSION S WERE FILED BEFORE LD. CIT (A) WHICH ARE TABULATED IN HIS ORDER AT PAGES 1 TO 15. DURIN G THE COURSE OF HEARING THE ASSESSING OFFICER WAS ALSO CALLED UPON BUT HE HAS NOT RAISED ANY OBJECTION BUT SIMPLY STATED THAT THE REASONS RECORDED FOR ISSUING NOTICE UNDER SECTION 1 48 WERE VALID REASON. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERI AL ON RECORD THE LD. CIT (A) GAVE FOLLOWING FINDING WHICH ARE RECORDED AT PAGES 16 AN D 17 OF HIS ORDER :- THAT NOTICE U/S 148 FOR THE A.Y. 1998-99 WAS ISS UED IN THE NAME OF M/S. STEEL BULK NOT IN THE NAME OF SHRI SUNIL KU MAR PUGALIA HUF. THE ASSESSEE IN QUESTION IS SHRI SUNIL KUMAR PUGALIA HUF. M/S. STEEL BULK IS A TRADE NAME BUT THE SAME IS NOT THE NAME OF THE ASSESSEE IN QUESTION. THUS NOTICE U/S 148 WAS NOT ISSUED IN THE RIGHT AND CORRECT STATUS. THAT ON 28.05.2001 THE T HEN ASSESSING OFFICER ISSUED INQUIRY LETTER TO THE ASSESSEE FOR T HE A.Y. 1997-98 TO 2000-01. THE ASSESSEE REPLIED ON 20.06.2001. FROM THE INQUIRY FILE IT IS FOUND THAT THE ASSESSEE HAS EXPLAINED TH E SITUATION PRODUCED WHATEVER ASKED FROM HIM. ON PERUSAL OF REA SONS RECORDED U/S 148 IT IS FOUND THAT A.O. HAS MENTIONE D WHILE FINALIZING THE BLOCK ASSESSMENT PROCEEDING IN THE C ASE OF SHRI BHIKHA BHAI N. CHOUDHARY IN WHOSE CASE SEARCH AND S EIZURE OPERATION HAS TAKEN PLACE. THE ACIT CIRCLE-2 AHM EDABAD HAS GIVEN THE FINDING THAT SH. BHIKHA BHAI N. CHOUDHARY WAS ENGAGED IN ISSUING BOGUS BILLS AND WAS IN RECEIPT OF THE CO MMISSION FROM THE PARTIES WHO RECEIVED BOGUS BILLS. M/S. STEEL BU LK DAMANI CHOWK BIKANER IS STATED TO BE OBTAINED PURCHASE BI LLS FROM M/S. MUKESH STEEL AHD (STATED TO BE FLOATED 15 CONCERNS OUT OF WHICH ONE IS M/S. MUKESH STEEL) OF THE AMOUNT RS. 10 95 7 60/- WHICH 3 PERTAINS TO A.Y. 1989-90 . THE A.O. HAS NOT MAD E ANY ADDITION ON ACCOUNT OF PURCHASES FROM M/S. MUKESH S TEEL OF RS. 10 95 760/- BUT HE MADE ADDITION OF RS. 302 120/- O N ACCOUNT OF PURCHASES FROM M/S. MUKESH STEEL ENTERPRISES. THUS THERE WAS NO PURCHASES FROM M/S. MUKESH STEEL AS MENTIONED IN TH E REASONS RECORDED U/S 148. AS A MATTER OF FACT PURCHASES WER E MADE FROM M/S. MUKESH STEEL ENTERPRISES. SECOND LIMB OF THE REASONS RECORDED U/S 148 MENTIONS THAT ..I HAVE THEREFO RE REASON TO BELIEVE THAT THE INVESTMENT IN PURCHASE OF THESE GO ODS AND PROFIT THEREON CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. H ENCE NOTICE U/S 148 ISSUED. THE PURCHASES HAVE BEEN RECORDED BY T HE ASSESSEE IN HIS BOOKS OF ACCOUNT THUS INVESTMENT IN PURCHASES HAS NOT BEEN SUPPRESSED IN ANY MANNER SIMILARLY WHEN PURCHASES HAVE BEEN RECORDED IN THE BOOKS OF ACCOUNT SALES HAVE ALSO BE EN RECORDED. THUS HAVING REGARD TO OVER ALL FACTS AND CIRCUMSTAN CES OF THE CASE AND RELYING ON THE JUDGMENTS REPORTED IN 88 ITR 821 217 CTR 345 174 TAXMAN 438 220 CTR 629 AND (1998) TAX LR 976 (RAJ.) 257 ITR 198 136 ITR 330 160 ITR 412 280 ITR 541 I HOLD THAT THE REASONS RECORDED U/S 148 AS NON-EST NON EXISTENT INVALID AND SUFFERING FROM LEGAL INFIRMITY THEREFOR E I QUASH THE NOTICE ISSUED U/S 147/148 FOR THE A.Y. 1998-99. 4. NOW THE DEPARTMENT IS IN APPEAL HERE BEFORE THE TRIBUNAL. 5. THE LD. D/R PLACED RELIANCE ON THE ORDER OF THE ASSESSING OFFICER AND ON THE REASONS RECORDED BY LD. ASSESSING OFFICER. 6. ON THE OTHER HAND THE LD. COUNSEL OF THE ASSESS EE PLACED RELIANCE ON THE ORDER OF LD. CIT (A). 7. AFTER CONSIDERING THE ORDERS OF THE ASSESSING OF FICER AND LD. CIT (A) AND THE SUBMISSIONS OF BOTH THE PARTIES WE FIND NO INFIRMI TY IN THE FINDING OF LD. CIT (A). THE 4 LD. CIT (A) HAS GIVEN TWO REASONS FOR QUASHING THE ASSESSMENT. IT IS SEEN THAT IN THE REASONS RECORDED THE ASSESSING OFFICER HAS MENTIONE D THAT ASSESSEE HAS OBTAINED BOGUS BILLS FOR PURCHASES FROM M/S. MUKESH STEELS. IT IS SEEN THAT NO ADDITION ON ACCOUNT OF PURCHASES FROM M/S. MUKESH STEELS WAS MADE BY THE A SSESSING OFFICER. THEREFORE LD. CIT (A) HELD THAT THERE WAS NO VALID REASONS RECORD ED BY THE ASSESSING OFFICER AND ASSESSMENT CANNOT BE UPHELD. IT IS SETTLED POSITIO N IN LAW THAT IF NO ADDITION IS MADE ON THE BASIS OF REASONS RECORDED THEN OF COURSE REOPEN ING OF THE ASSESSMENT WAS BAD IN LAW AND WAS LIABLE TO QUASHED. 7.1. THE LD. CIT (A) FURTHER NOTED THAT THE ASSESSI NG OFFICER HAS MENTIONED IN HIS ORDER THAT THE INVESTMENT IN PURCHASE OF THESE GOODS AND PROFIT THEREON CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND HENCE NOTICE UNDER SECTION 1 48 WAS ISSUED. THE LD. CIT (A) NOTED THAT WHATEVER THE PURCHASES WERE MADE BY ASSE SSEE THEY HAVE BEEN RECORDED BY THE ASSESSEE IN HIS BOOKS OF ACCOUNT AND THUS INVESTMEN T IN PURCHASES HAS NOT BEEN SUPPRESSED IN ANY MANNER. SIMILARLY WHEN PURCHASE S HAVE BEEN RECORDED IN THE BOOKS OF ACCOUNT SALES HAVE ALSO BEEN RECORDED. THUS PROFI T ON SALE GETS AUTOMATICALLY REFLECTED IN THE BOOKS OF ACCOUNT. ACCORDINGLY HE HELD THAT THERE IS NO BASIS OF ISSUING NOTICE UNDER SECTION 148 AND THEREFORE THE SAME WAS QUAS HED BY HOLDING THAT NOTICE ISSUED UNDER SECTION 148 WAS NON-EST NON EXISTENT INVALI D AND SUFFERING FROM LEGAL INFIRMITY. WHILE HOLDING SO THE LD. CIT (A) HAS PLACED RELIAN CE ON 88 ITR 821 217 CTR 345 174 TAXMAN 438 220 CTR 629 AND (1998) TAX LR 976 (RAJ. ) 257 ITR 198 136 ITR 330 160 ITR 412 280 ITR 541. THESE FINDINGS OF LD. CI T (A) REMAINED UNCONTROVERTED. ONCE ON THE BASIS OF REASONS NO ADDITION WAS MADE O N ACCOUNT OF PURCHASES FROM M/S. MUKESH STEELS THEN IN OUR VIEW THE LD. CIT (APPEA LS) WAS RIGHT IN HOLDING THAT NOTICE 5 WAS NON-EST AND INVALID. IN FACT THE PURCHASES WE RE MADE FROM M/S. MUKESH STEEL ENTERPRISES AND THEY HAVE BEEN SHOWN IN THE BOOKS O F ACCOUNT. IN VIEW OF THESE FACTS AND CIRCUMSTANCES AND IN VIEW OF REASONING GIVEN BY LD. CIT (A) WHICH ARE REPRODUCED SOMEWHERE ABOVE IN THIS ORDER WE HOLD THAT LD. CIT (A) WAS JUSTIFIED IN HOLDING THAT NOTICE UNDER SECTION 148 WAS INVALID AND THEREFORE THE ASSESSMENT WAS ALSO INVALID AB- INITIO. ACCORDINGLY WE CONFIRM THE FINDING OF LD. CIT A). 8. IN THE RESULT APPEAL OF THE DEPARTMENT IS DISMI SSED. 9. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 15. 12.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JODHPUR COPY FORWARDED TO :- THE ITO WARD 1(4) BIKANER. SHRI SUNIL KUMAR PUGALIA HUF BIKANER. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 339/JODH/2009) BY ORDER AR ITAT JODHPUR.